Updated: May 24
Signing in to the digital age
The digital world seems to be synonymous with “convenience”. Stepping into the interconnectivity of businesses and organisations, digitalisation is key to communicating efficiently regardless of different time zones and places.
Convenience is also a major plus point for international business activities. With everything literally at your fingertips, doing business globally has never been easier. Transforming paperwork into accessible, on-the-go, electronic documents makes it convenient for everyone anywhere, anytime. But this level of convenience does not undermine the legality of any business agreement conducted digitally.
Do not be fooled by the casualness of electronic agreements, know that your electronic signature holds equal weight compared to a written or “wet” signature. We all need to be signing into the digitalised age of Electronic signatures, or E-signing. Or as we like to call it, Z-signing.
Read on to learn more about the legal compliance for electronic signatures in Hong Kong specifically and watch out for more in this series on Singapore, New Zealand, Australia, UK, Cayman Islands and BVI.
A legally binding business agreement is usually only valid when the parties involved have signed it. Even in movies when a business deal is underway, the signatures on the agreement are the surest way of indicating its validity. The importance of signatures is paramount to validate a business agreement.
With the digital age, signatures do not need be done in person or in ink. Papers have been replaced by tablets, LED screens, and smartphones. Although there are high levels of convenience and simplicity with taking business activities digitally, it is also why we should be aware of the legal implications behind the electronic signature.
Hong Kong’s Electronic Signature Requirements
The use of electronic signatures is under the compliance of the Cap. 553 Electronic Transactions Ordinance (ETO). Hong Kong also adopts a tiered Electronic Signing scheme.
Under ETO, Part III, Section 6:
Where an electronic signature of the first mentioned person satisfies the requirement if—
(c) The first mentioned person uses a method to attach the electronic signature to or logically associate the electronic signature with an electronic record for the purpose of identifying himself and indicating his authentication or approval of the information contained in the document in the form of the electronic record;
(d) Having regard to all the relevant circumstances, the method used is reliable, and is appropriate, for the purpose for which the information contained in the document is communicated; and
(e) The second mentioned person consents to the use of the method by the first mentioned person. (Replaced 14 of 2004 s. 5)
Applicability of an Electronic Signature
Admissibility of electronic records:
Without prejudice to any rules of evidence, an electronic record shall not be denied admissibility in evidence in any legal proceeding on the sole ground that it is an electronic record.
So, in a nutshell, you should consider anything you sign digitally to have equal weight to anything you sign on pen and paper in Hong Kong. For most of us living in countries with developed internet and communications infrastructure, electronic signatures will become a part of everyday life, if they haven’t already.
Founded in 2013, Zegal is the fastest growing LegalTech company operating across Asia Pacific and Europe. Today, business users and lawyers across the globe trust Zegal’s software to solve legal problems in an affordable and efficient way.
Zegal is led by a talented team of 60 employees and has offices in Hong Kong, Singapore, Nepal, Australia, New Zealand, and the UK.
Zegal has been featured in the New York Times, Forbes, and Huffington Post, and was recently recognised in the South China Morning Post as an emerging LegalTech company in the artificial intelligence space.